Sterling Construction Company Inc (STRL)
Cash conversion cycle
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 49.52 | 58.71 | 72.45 | 80.65 | 69.14 | 66.36 | 84.56 | 79.92 | 70.21 | 73.24 | 97.03 | 90.23 | 72.61 | 76.69 | 77.85 | 79.60 | 70.29 | 71.36 | 87.10 | 91.28 |
| Number of days of payables | days | 28.30 | 28.17 | 34.56 | 35.26 | 29.85 | 32.59 | 33.85 | 31.56 | 26.61 | 26.95 | 43.54 | 38.80 | 36.07 | 30.10 | 39.41 | 40.28 | 32.58 | 28.11 | 37.23 | 40.64 |
| Cash conversion cycle | days | 21.22 | 30.53 | 37.89 | 45.39 | 39.30 | 33.76 | 50.71 | 48.36 | 43.61 | 46.30 | 53.48 | 51.43 | 36.53 | 46.59 | 38.44 | 39.32 | 37.70 | 43.24 | 49.87 | 50.64 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 49.52 – 28.30
= 21.22
The analysis of Sterling Construction Company Inc.'s cash conversion cycle (CCC) over the specified period reveals significant fluctuations, indicative of evolving operational efficiencies and working capital management strategies.
Between June 30, 2020, and June 30, 2021, the CCC exhibited a decreasing trend, moving from approximately 50.64 days to around 39.32 days. This decline suggests an improvement in the company's ability to convert its investments in inventory and receivables into cash more quickly, possibly due to enhanced receivables collection processes, optimized inventory turnover, or both. This period of reduction indicates effective working capital management that contributed to faster cash flows.
However, from June 30, 2021, onwards, the CCC demonstrated variability, with a temporary increase observed around September 30, 2021 (approximately 38.44 days) before rising again, notably reaching a peak of around 53.48 days by September 30, 2022. These increases may reflect longer receivable collection periods, extended inventory holding times, or variations in payment terms with suppliers.
A notable turnaround occurs toward the end of the observed period: from December 31, 2023, through March 31, 2025, the CCC steadily decreased from 33.76 days to 21.22 days. This ongoing downward trend signifies a significant improvement in working capital management, implying more efficient collection, inventory, and payables processes, culminating in the most rapid cash cycles within the analyzed timeframe.
Overall, the company's cash conversion cycle has exhibited considerable volatility, characterized by periods of both improvement and deterioration. The notable contraction in recent periods indicates strategic or operational adjustments that have enhanced liquidity and operational efficiency, potentially benefiting the company's cash flow position and overall financial health.
Peer comparison
Mar 31, 2025